Sustainability and Business

PGPEx 17-19
Take Home Assignment
Total Marks: 10

My Case Analysis Notes

1. My name & Reg. No.: SAGARICA BRAHMA (2017PGP103)

2. The case: Unilevers new global Strategy: Competing through sustainability

3. Who is your client? Unilever

4. What is the critical challenge the client faced?

Going by the financial results in 2014, it was found that Unilever, despite surpassing its
competitors sales growth, reported a figure that was its lowest in the decade. The final
quarter showed an under-whelming 2.1% growth. These less-than-satisfactory results were
mainly because in the developed countries, the growth rates were diminishing, and so were
the demands. To add to the woes of Unilever, there was the fact that the CEO, Paul Polman,
could not foresee any remarkable improvement in the growth rates in 2015.
This already difficult situation was made more complicated by the situation the company
was in. It was amidst a phase where it was transitioning into a sustainability driven strategy
called Unilever Sustainable Living Plan(USLP) that focused on the long-term benefits of the
company. This required the organization to make investments that recovered only in the
long-term.
On top of all these, there were two key areas where Unilever failed to achieve its target-in
reducing its own internal Green House Gas(GHG) emissions and in reducing its water use.
These were the critical issues that Unilever was facing at that point of time.
5. Who are the main stakeholders involved here and what are their concerns and
interests?

The main stakeholders included not only the business and functions under its direct control,
but also extended to the country it was operating in, the employees, the suppliers and the
consumers of its products along with the government and the NGOs. In short, it included the
entire value chain.
The stakeholders eyed the sustainability-driven strategy of Unilevers with mixed views-
some admired the move, some showed a certain amount of doubt while others have
expressed a lot of skepticism regarding the feasibility of the move. They felt that the idea
was too ambitious to be practically feasible and that the organization should have set more
realistic targets like increasing the quarterly revenues or the brand equity. The stakeholders
had expected Unilever to shed some light on the results and figures about cost savings which
it did not. Hence, despite Mr. Polmans request to the shareholders to think ahead into the
future, most investors felt nervous about investing into Unilevers USLP strategy-because, at
the end of the day, even the most patient investors of the world expect returns on their
investment.

6. What is the root issue the client must resolve in order to deal with this critical
challenge?

The root issue Unilever was faced with was the challenge of striking a balance between the
financial expectations from the company and its environmental & social commitments.
Unilever understood that it cannot work on its own if it wanted to achieve its broader goals.
It needed the support of all the stake-holders involved-governments, NGOs, suppliers and
others to address the challenges it was facing. It was imperative for them to motivate
everyone in its value chain to implement a sustainable way of life.

7. What plausible, mutually exclusive, strategic options should the client consider for
resolving this root issue?

Unilever could have taken the following measures to resolve the root issue:
It could bring about changes to the managerial structure and personnel, increase revenues by
producing sustainable products, develop new sustainable products using research &
development activities, exercise its skill, influence & resources to bring about
transformation and engage other companies to take responsibility and educate consumers to
change hygiene behaviors and teach them about sanitation.

8. Which of these options do you recommend, and why?

The companys idea to exercise its influence, skill & resources to transition from a company
for which Sustainability was a mere PR driven Corporate Social Responsibility Program to
one whose core competency was driven by sustainability is a commendable one. The
decision to involve all the stakeholders-from the suppliers to the consumers-in the value
chain seems like the best possible way to go about it. It is because, each of these entities, if
motivated in the correct direction, towards a sustainable lifestyle, can help in bringing about
a major change.

9. What implementation issues should your client anticipate and how should they
address them?

Firstly, it is easy to ideate the scalability but difficult to implement. Since the entire value
chain must be changed/addressed, it will take a lot of time and support from every individual
member in the chain.
Secondly, consumer habits are hard to change-initially it is easy to practice sustainability,
but old habits die hard.
Thirdly, it is difficult for many in the financial markets to understand how the organization
has changed strategies-from a PR driven CSR activity to adapting sustainability as a core
competency.
Thus, the company needs to spend a lot of time explaining it to the investors. Sustaining the
performance of the organization is critical to increasing the trust of the stakeholders
involved.

10. Any other comments

If the organization can change the leadership and management structure, hire and train top-
notch talent, use a performance based management system and a inculcate a pro-active HR
function with access to resources to develop a culture ingrained in sustainability, it will be
possible for Unilever to balance economic gains and social & environmental commitments
all at once.

********************************Best Wishes************************